4Front Ventures Corp has retained Canaccord Genuity Corp. to lead its ongoing efforts to consolidate and streamline its capital structure. The immediate focus will be on exploring opportunities for refinancing existing debt and raising fresh growth capital, while also considering a full range of operational and strategic alternatives, with the ultimate objective of aligning all capital and operational partners with the long-term financial success of the Company.
In addition to the retention of Canaccord Genuity, the company has agreed to a modification of its senior secured credit facility previously announced on October 16, 2023, with ALT Debt II, LP, an affiliate of Altmore Capital. As part of the amendment, the lender has advanced approximately $850,000 to the company. An additional $1.75 million remains available to the company at the discretion of the lender. The outstanding principal of the credit facility will bear simple interest at a rate per annum equal to the greater of (i) the WSJ Prime Rate plus 10% and (ii) 18.5%, payable monthly; and the amendment includes a paid-in-full fee provision, in addition to the existing exit fee, payable at maturity. Full details of the transaction are in the company's filings.
In connection with the amendment, the company intends to enter into a restricted stock unit agreement under which the company will double the percentage of restricted share units previously issued to the lender, resulting in a total issuance of 49,957,714 RSUs. Each RSU will settle into one Class A subordinate voting share of the Company upon the earliest of certain specified conditions, each as more fully described in the RSU Agreement. The issue price of the RSUs will be equal to CAD$0.08 per RSU. If at the time of the distribution event, the number of shares underlying the RSUs is less than 4.24% of the fully diluted shares (calculated per the terms of the RSU Agreement) of the company, an additional number of RSUs will be issuable to the lender by the company concerning the deficiency, each issuable at the closing market price on the Canadian Securities Exchange on the trading day before issuance.
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4Front Ventures
www.4frontventures.com